Blair Price
WHILE there was good progress on the upstream front, Oil Search’s crude production in Papua New Guinea fell 26% to 1.33 million barrels of oil equivalent in the September quarter due to an environmental scare at the Kumul marine terminal.
Oil Search's offshore Kumul terminal in the Gulf of Papua
This fall from the previous quarter was due to several weeks of reduced production as Oil Search contracted a diving support vessel to investigate why a minor oil sheen of up to 8 litres was observed near its offshore export terminal.
No source of any leak was found.
Despite the need to shut in key producing fields during this time Oil Search still expects to hit its 6.2-6.7MMboe guidance range for 2012.
In other news, outside of the PNG LNG project’s third train-related news which is covered in a separate story today, Oil Search said the construction of the well pad for the Mananda 6 well in the Southern Highlands region was underway.
It is expected to spud in the March quarter to appraise the Mananda 5 well discovery – which clocked up 1000-1200 barrels of oil per day during an extended flow test.
Over to the Middle East, the 60% Oil Search-owned Taza 1 well in Iraq’s Kurdistan region is drilling ahead towards the primary oil and gas target.
A well on the Semda prospect in Oil Search’s wholly owned licence in Tunisia is scheduled to spud in this quarter while its operations in Yemen are still plagued by some difficulties.
Oil Search said its 34%-owned Block 7 tenement remained in a state of force majeure and it was monitoring the security situation while it was yet to finalise the sale of its 40% interest in Block 3 to French supermajor Total SA.
Managing director Peter Botten also commented on the recent joint venture deals with Total over its onshore and offshore Gulf area licences in PNG, with the farm-down transactions still subject to government approval.
“Total has extensive experience in developing major LNG projects and has similar aspirations to Oil Search in assessing and, in the event of success, developing an LNG project in the Gulf of Papua,” Botten said.
“Oil Search and Total have also agreed to form a strategic partnership to look at other licences in PNG, excluding the Highlands area.”
Their first offshore well for the non-PNG LNG project-related gas hunt is expected to spud in the Gulf of Papua in the March quarter – despite the contracted Stena Clyde semi-submersible rig subject to investigations relating to two recent fatalities on board.
In regards to the PNG LNG project (Oil Search 29%), the Hides field drilling program will soon have a second rig in action while Oil Search said significant progress was achieved at the LNG plant site in the recent quarter.
Oil Search ended September with a cash position of $US573 million and made $101.5 million in oil, gas and refined product sales for the quarter – almost half of the previous quarter’s figure.
The average oil price received in the recent quarter was $114.67 a barrel.
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